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What you need to know
- Lowe's held its annual investor day Wednesday, laying out its plan for 2025 and beyond as it works to return to revenue growth.
- The sales are predicted to drop in 2024 as compared to the 2023 period, due to inflation and slowing down of housing markets.
- A better housing market will help boost sales, according to the retailer.
Lowe’s said on Wednesday it expected to see sales increase in the next fiscal year. The home improvement retailer had been struggling with lower discretionary expenditure and a sluggish housing market.
The retailer announced its fiscal projections and new features at its annual Investor Day on Wednesday. The retailer said a revamped rewards program, expanded online product selection, and more should improve sales with both do-it-yourself (DIY) customers and professional contractors, a market Lowe's is looking to grow.
Lowe's affirmed its guidance for fiscal 2024, expecting $83 billion to $83.5 billion in revenue, down from $86.38 billion in fiscal 2023, with a 3% to 3.5% decline in comparable store sales from last year.
Lowe's Sees Sales Growth Likely in 2025, Beyond
Lowe’s outlined the range of possible outcomes as it looked forward to its fiscal year 2025. “uncertainty” It is difficult to predict when the housing sector will rebound, since it depends on a range of factors such as interest and mortgage rate and new home construction.
In a "moderate" home improvement market, Lowe's expects sales to rise year-over-year to $84 billion. However, factors such as changing mortgage rates can have a positive or negative impact on sales. Projections range from $82 to $87 Billion.
In the coming three to five year period, Lowe’s said that lower mortgage interest rates along with improved consumer confidence, and increased discretionary income should help boost sales. Lowe’s added that there are other trends, like Millennials and remote working.
Lowe’s (HD) and its rival Home Depot have both stated that over the past year, consumers are pulling back their discretionary expenditures on DIY projects and other appliances following a spike in these categories during COVID. To compensate for the decline in consumer spending, both retailers are working to increase their share of the market among contractors.
Lowe’s and Home Depot both exceeded expectations in the most recent quarters. However, executives did note that they were still a bit behind. “continued softness” The following are some examples of how to use “big ticket” Spending “macroeconomic uncertainty.”
Lowe's shares were little changed Wednesday afternoon, and have gained north of 20% on the year.
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